Timing is Everything: What is the Statute of Limitations for Negligent Construction Claims in Oregon?

Construction Law Report Spring 2013

05/01/2013

Adele J. Ridenour

Oregon courts have recently struggled with a very important and complex issue in construction defect cases: just what is the statute of limitations for negligent construction claims?  Until a few years ago, most trial courts ruled that the statute of limitations was six years from when an owner discovered or reasonably should have discovered a claim.  See ORS 12.080(3) (which governs claims for injuries to interest of another in real property).  However, some courts were persuaded that the statute of limitations fell under ORS 12.110(1), which is two years from discovery or reasonable discovery.  In 2010, the Oregon Supreme Court alluded that the latter two-year statute is the correct statute.  However, the reference to the two-year statute of limitations was buried in a footnote, and the statute of limitations was not even at issue in the case.  The footnote therefore appeared to have left more questions than answers, including in particular just what was the precedential value of the Supreme Court’s footnote.

More than two years later, we are still no closer to knowing with certainty the statute of limitations for negligent construction claims in Oregon.  In general, most trial courts have now adopted one of the following three approaches:

  • The 2010 Supreme Court footnote is not controlling, and the statute of limitations is six years from when an owner discovers or reasonably should have discovered a claim;
  • The 2010 Supreme Court footnote is controlling, and the statute of limitations is two-years from when an owner discovers or reasonably should have discovered a claim; or,
  • The 2010 Supreme Court footnote is not controlling, and the statute of limitations is six years without a discovery rule.

This last approach has raised even more questions, including when does the statute begin to run?  Some courts following approach No. 3 have held it runs from when damage occurs; other courts have held it accrues from completion.

Whatever the three approaches a court follows, the debate over the correct statute of limitations for negligent construction claims rages on in Oregon, until the appellate courts and/or the legislature clear up the issue once and for all.

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